 Good day, fellow investors! The first weekend of May would stock for capitalists Warren Buffett, Charlie Munger answering our questions and discussing what has been going on with them, with Berkshire and six hours of entertainment where every investor can learn so much. I have written down 15 points that I got out from the discussion and I want to share them with you. I'll save you six hours of listening to Warren Buffett and Charlie Munger if you don't have the time and we'll let's see show a little bit how I have on some points that they are mentioning a different perspective. We'll discuss accounting changes, index changes, how survivals win, how to invest when things are not good, discussing gold, China and the US, what does Buffett think about the trade war, Wells Fargo, healthcare, his partnership with Amazon and JP Morgan, how would he invest one billion now in China or the US, why long-term bonds are a terrible investment, moats and Elon Musk, the good buyback Apple, formula for intrinsic value, asset light businesses, cryptocurrencies, 401k plans and missing out on Amazon. Okay the first thing I want to show is very important accounting changes and if you look at Berkshire's earnings they will be negative for the first quarter compared to very positive earnings for 2017. However if you see operating earnings are much more positive than 2017 at 5.2 billion but investments and derivative gains and losses were negative as they now have to mark to market on a daily basis all the stocks they own. So as we have seen the market was volatile the stocks Berkshire owns have gone down and that's why you see the 6 billion lost there perhaps tomorrow or in the next 10-20 days those stocks will go up or they perhaps even did go up in since the date of the report what was it 30 March so that might already have changed so we now have to focus when we discuss earnings of Berkshire to the operating earnings and then calculated the taxes ourselves to get to let's say the normal adjusted earnings for Berkshire stock prices will go up and down and there will be huge losses and huge gains there so we have to even that out so the price earnings ratio for Berkshire is something you can forget now you have to calculate it yourself. Now Buffett discusses something how it was a great investment to invest in the SAP 500 but then he shows this from 1942 I think and he shows how there were various indexes one could invest then the 13 industrials 20 railroads 15 utilities and 65 stocks and then he discusses how the Dow Jones index survived but what happened to the railroad index utilities index or the other 65 stocks index nobody talks about that and we now have the SAP 500 that Buffett is promoting but then it didn't exist so he says yeah I believe if you invested 10 000 in the SAP 500 in 1942 it would now be 51 million but the SAP 500 didn't exist then and so it's all about survivor survivorship bias because yes we look at the Dow but who looks at the railroad index which was very very strong then and people did invest in them equal to the Dow or in the utilities or or other players so that's something to keep in mind when you see all those indexes we are now at 6000 indices around the world and some of them will do well and those will be picked oh yes you should invest in stocks those who don't do well get forgotten get put away nobody talks about the railway index now so keep that in mind when you invest in indices so the key with Buffett always invests when things are not good he says that if you invested 10 000 in the SAP 500 in 1942 when of course I already mentioned didn't exist now it would be 51 million and he then touches touches on gold that if you invested at the same point 10 000 in gold that you would have 300 ounces of gold that didn't produce anything and the value would be around 400 000 that is about 50 million less and here I agree with Buffett gold is not an investment and that's very important message for all my viewers gold is a hedge for loose monetary policy and that's something that can happen in the next 10 years and that's why I like to be hedged a little bit with gold and that's it really portfolio location rebalancing trading lowering increasing and then I also like to own miners that are producing something they have a cost they have a selling price so it isn't that of a bad investment as holding physical gold however on the long term you don't want to own gold nor cash in the long term you want to own producing productive assets like stocks in the long term because that will help you do wonders however a little hedge here and there when it's opportune to do so it's not bad china and the us he says long term superpowers and that he doesn't think nobody there will do foolish things to dampen global prosperity and I think we are both smart the presidents are both smart too let's say gain a few political points here and there but no fears now number five is wealth fargo buffett always talks about investing in great companies with integrity with integrative management but then wealth fargo is not a business like that and it's really in trouble and should buffett sell and here you see buffett says something but then does the opposite because he is still invested in wealth fargo and I think he cannot sell because if he would start selling wealth fargo then the bank would go bankrupt because then if buffett leaves something like that it's a stalavista and that's why he always is very careful with what he's saying and what he is doing and you have to always see behind the lines behind what he is saying what the nice granddaddy from omaha is saying and what the real businessman is doing so he's holding to wealth fargo his cost base is much much lower than where the stock is now and he doesn't really care about the ups and downs as long as the company is profitable making good businesses and perhaps even increasing the profits and being better in the future so solving the integrity issue he's mentioned that he was buying American Express when it was in trouble and all other companies mostly when they are in trouble he's not buying wealth fargo now more he already had it in the beginning but that shows how he's not just a nice guy he's a really sharky businessman just a note on the healthcare partnership with jp morgan and amazon this is a very important topic and i will dedicate a special video for it but they say they are now at having a ceo in a few months and that's how long term they think no rush but this is really disruptive or even displacing for current healthcare so be careful on healthcare investments other healthcare investments you have when he was asked how to invest one billion china or the us buffet he is biased domestically us monger he says he is much more exposed to china because he sees the growth he sees the potential he sees the valuation and monger loves china more than buffet so monger is of course smaller portfolio he is more flexible and tells us that we might again relook at china especially as there have been some new opportunities and as i did the series in the summer on china i'll do now again on chinese stock stocks to see what's going on and whether there are better new opportunities especially from the new ipos that some have fallen really significantly moats on elon musk elon musk recently he always has to comment on everything said how moats are lame and how it's all about innovation buffet agrees that innovation is key and it has become more difficult to keep a moat but he will stick to businesses with moats and the tension between the guys will probably continue because elon musk is leveraged aggressive marketing losing money not having a profitable business model and buffet is something completely opposite so it's very nice to see how these two different worlds interact and grow in this environment we'll see who will well buffet is already has been around for 50 years we'll see i think i hope musk will also be around in 50 years but he will have to start doing business better he should learn how to do business not just chasing capital around after capital round now the good buybacks apple just announced 100 billion buybacks and buffet is happy to own apple because they will own more and more about the company that has a great brand a great ecosystem great cash flows mongering his style says how some people do buybacks just to keep the stock up which is insane and immoral apart from that is fine so it's up to us to see whether the buybacks of the stocks we own are fine or immoral on apple as they believe that the intrinsic value of apple is much higher than the current level and that the best investment from apple's cash is to reinvest it in the stocks so if buffet says that it might be the case that the apple investment is still very very good to buy back the stock looking of course at the long term and i made a video on why buffet is buying apple then there was a really complex form formula like question mathematics how do they analyze stocks what's the intrinsic value and they say there is no formula sometimes you just use common sense you see okay this is cheap let's buy it like cosco monger says it was it was at the p ratio of 12 the price to book ratio was free point something but he found it very cheaply at that level and they bought in cosco he bought cosco so it's all about common sense every stock is different like person persons you can you have to use all the formulas in the book perhaps also in my book but the key is to really apply common sense because everybody has all the formulas there is no magic formula everybody has all the formulas you need to have all the formulas you need to apply them and then use common sense then something very interesting today successful businesses are asset light he doesn't expect he didn't expect corporate america to have earnings above six percent of gdp which is now around eight to ten percent of gdp since 2008 but the four largest companies today don't need any tangible assets to operate no depreciation so their returns on equity are much much higher and that's what changed in the world and he thinks the market didn't really adjust yet for asset light businesses which means higher returns on investment cryptocurrencies nobody likes it buffet doesn't like it because it's all about finding the next fool that will pay more for that those are non-productive assets like a gold and in this case there are many many incentives for other people's ipos chasing fees chasing rewards chasing everything but the main promise of cryptocurrencies is exchanging money making through check transactions and that should be frictionless and costless on a piece of paper on a check or even cheaper when that some cryptocurrencies reach that then it will be good for them or a good business but nobody will make any money of it because that's not the point and that's what also Buffett says like the tulip mania on 401k plans the key is he's always promoting index fund investments but his employees all the 250 000 berkshire employees cannot invest in index funds and that's very very interesting they have to invest in actively managed funds with higher fees and perhaps buying more of berkshire so again he's saying something doing the opposite be careful with that and be careful with investing in index funds there is something behind that's not so correct and moral from Buffett there number 15 he says that he missed out on amazon because what Jeff basis did was a miracle and he doesn't invest in miracles so his first rule is always don't lose money you can always lose money with amazon you could always have lost money had lost money with amazon in the past and that's why he didn't invest he doesn't like to lose money so this was the 15 comments i found from Buffett hope you enjoyed hope i summarized looking forward to your comments your points that you took out from the conference always nice to read your comments thank you for watching and i'll see you in the next video